The MarTech Optimization Playbook For Modern CMOs | Martech Zone
Marketing technology (MarTech) is the marketing strategy of today’s leading companies.
It’s the right move.
MarTech has seen a significant jump in popularity as expansive data availability, new digital tools, and advanced analytics empower businesses to optimize customer engagement and drive targeted marketing strategies.
However, many companies are significantly underutilizing the MarTech stacks. Even as they invest heavily in the latest technologies, they struggle to make the most of their solutions, delaying or diminishing their MarTech payback model in the process.
Brands are using just 33 percent of their marketing stack capabilities, down from 42 percent in 2022 and 58 percent in 2020. With Chief Marketing Officers (CMOs) saying they allocate a quarter of their total marketing budget to technology, many feel increasing pressure to cut costs and justify spending.
As a result, for the first time since the birth of MarTech, the C-suite is spending more time optimizing the technology than installing it.
CMOs must ensure that their MarTech stack is implemented, integrated, and optimized for revenue generation that repays the upfront investment in technologies.
Here’s how marketing leaders and their C-suite counterparts can begin that process.
#1 Prioritize Retention of High Lifetime Value Customers
Every buyer is valuable, but not every customer has the same revenue potential.
To maximize and accelerate a MarTech stack’s ROI, prioritize retaining high Lifetime Value (LTV) customers. These buyers typically spend more, stay loyal longer, and significantly contribute to revenue generation.
Start by establishing a hierarchy of customer and prospect marketing strategies based on their efficacy in revenue generation. To achieve this:
- Nurture prospects with an omnichannel, analytics-driven marketing strategy
- Assign scores for propensity to buy
- Use proxies to personalize prospect offers.
Segment customers based on LTV to tailor marketing efforts more personally and efficiently, capitalizing on consumers’ desire for personal interactions.
#2 Focus On the Highest Revenue Generating Strategies
Learn about the MarTech stack’s total value of ownership (TVO) and compare it to the total cost of ownership (TCO).
This allows brands to identify operational efficiencies that minimize TCO.
Data-driven, personalized retention and cross-selling of existing LTV customers typically offer the highest ROI. This requires acquiring first-party data, compensating customers for zero-party data, and engaging in continuous, hyper-personalized, and contextual marketing that converts prospects into customers.
Most organizations have enough data but struggle with making it actionable. The key is integrating various data sources to unlock the potential of your data as one cohesive unit focused on improving customer experience.
Drive a data strategy that leverages first-party (1P) data, enriches customer profiles and behavior data, while keeping privacy architecture in mind. This approach ensures compliance with regulations while maximizing the value of your data.
The highest revenue-generating strategies might differ depending on the company, industry, or consumer audience. However, focus on the 20 percent of strategies that drive 80 percent of revenues, optimizing your efforts and directing them toward your most salient customers.
Regardless of your strategy, brands must leverage AI as a force multiplier.
Use AI (including GenAI) as a force multiplier to scale solutions, address internal skill gaps, boost efficiency, and accelerate innovation. Leverage AI features first from existing tech platforms, and as you scale your experiments, look to identify IP opportunities that are rooted in your data.
#3 Master the Functionality That Matters Most
Master the tech functionality that is most relevant to the brand’s marketing model.
As brands poured millions of dollars into shiny new MarTech solutions, many forgot to equip their people to use this technology well. As one marketing analysis notes:
Probably the most underutilized remedy for underutilization…is investing in good enablement.
Companies can solve this by offering training, coaching, peer support programs, and actionable reference materials. When coupled with a culture that encourages experimentation and learning, brands can ensure that their teams are capable of maximizing their MarTech investments.
Specifically, focus on core tech investments and remain agile about peripheral systems. Not all tech is of equal value, so prioritize investments that directly impact your key business objectives.
#4 Align Marketing With Peak Revenue
To accelerate ROI on MarTech tools, align marketing efforts with peak revenue periods.
Analyzing seasonal trends, consumers’ purchasing habits, and market demand can inform more effective marketing strategies and utilization of MarTech investments.
At the same time, develop Martech and Adtech into one ecosystem instead of maintaining specialized, siloed implementations. This unified approach ensures seamless data flow and more effective campaign management.
Understand the company’s revenue cycle related to marketing operations and identify the MarTech investments supporting peak revenue. Combine these efforts with internal governance structures so that incremental revenue generated by the MarTech stack is applied to the technology payback cycle.
#5 Define and Share KPIs
Effective MarTech implementation isn’t just the responsibility of the marketing department. It requires close collaboration between marketing, IT, data analytics, sales, and data analytics teams to produce optimal results that generate revenue and justify MarTech investments.
Begin by defining the shared KPIs between marketing and other departments. This allows everyone to measure success and implement accountability for revenue generation.
Cooperation and soft collaboration across departments are core strategies for successfully optimizing MarTech strategies. Promote this within the organization by implementing shared compensation models that could benefit organizational synergy and incentivize all business functions to pursue the same outcomes together.
Make the Most Of Your MarTech Investment
MarTech is the right marketing strategy for today’s companies, allowing small businesses and global brands to connect with their customers, convert browsers into buyers, and drive data-driven decision-making for sustained growth and competitive advantage.
Understandably, business leaders want to see ROI from their MarTech investments, and they want results sooner rather than later.
For modern CMOs, the challenge is to optimize their existing MarTech stack, maximizing its capabilities to generate measurable revenue and justify the substantial investments made in these technologies. The solution comes from implementing, integrating, and optimizing their MarTech stack for revenue generation that repays the upfront investment in technologies and positions their companies to remain agile as new and better solutions emerge.
